BUSINESS – Japan’s matcha production is under mounting pressure as record-breaking heatwaves slam key tea-growing regions, squeezing already struggling output, even as worldwide demand climbs to unprecedented levels. In Kyoto, producers of tencha, the shaded tea leaves essential for premium matcha, have experienced steep yield losses. Sixth-generation farmer Masahiro Yoshida reports a 25% drop in his tencha harvest, bringing it down to just 1.5 tons compared to the usual 2 tons. “Last year’s summer was so hot that it damaged the bushes, so we couldn’t pluck as many tea leaves,” he told Reuters from his Uji storefront.
The decline in output comes against the backdrop of a global obsession with matcha, especially among millennials and Gen Z. Cited from The Straits Time, Cafés across Europe and North America are featuring matcha lattes, smoothies, and desserts, feeding a craze ignited by perceived health benefits, high antioxidants and caffeine—as well as viral social media exposure. Singapore-based wholesaler Tealife even put purchasing caps in place as their matcha demand increased ten‑fold within a year. “I’m basically always out of stock,” admitted founder Yuki Ishii.
Despite tencha production increasing nearly 2.7 times over the past decade to reach 5,336 tons in 2024, the Japanese Tea Production Association warns that this year’s harvest will fall short due to climatic stress. Prices for tencha have surged; Kyoto auctions in May fetched a record ¥8,235 per kilogram—up 170% compared to the previous year and eclipsing the former high of ¥4,862 in 2016.
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Exports are soaring too: Japan’s green tea export values, bolstered by matcha, jumped 25% to ¥36.4 billion in 2024. Yet the supply deficit remains a major challenge. Marc Falzon of New Jersey’s Ooika Co. notes that hopes for a bumper yield to ease the shortage were unmet. He warns that new plantations won’t reach production maturity for another five years, predicting even steeper price hikes.
Adding further strain, Japan’s tea-farming population has shrunk markedly—from over 53,000 in 2000 to fewer than 20,000 in recent years—while global matcha demand continues to expand. Moreover, matcha production is complex and time-intensive, requiring shade-grown tencha, seasonal harvests, and slow stone milling. These factors compound the difficulty of scaling up rapidly.
The current scenario suggests that the matcha shortage is not a temporary blip. Climatic extremes, demographic declines in farming, and time‑heavy production processes mean limited capacity to boost supply in the near term. As long as demand remains frenzied, prices are poised to climb further, potentially squeezing out smaller producers and pushing matcha to luxurious price points globally.
